New travel data set to take temperature of the economy, ASX set to open higher on strong US lead

Thanks for your company this session — you can catch more finance news on The Business with Kirsten Aiken tonight at 8:45pm on ABC News Channel or anytime on iView  — she’s speaking with Citi on China’s economic outlook and the Australian Shareholders’ Association on AGM season.

Reporter Rachel Clayton will join you bright and early tomorrow for the latest on markets here on the blog.

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The ASX 200 has jumped up 0.8 per cent this session, to a fresh closing high.

It was off its high point of the session, but still a solid showing with most sectors gaining ground.

Here are the best and worst performers on the benchmark index:

And payment company Tyro slumped 11 per cent on news the government wants to crackdown on card surcharges.

In other news, Westpac shares closed 1.6 per cent higher, with good gains from ANZ (+0.9%), NAB (+1.5%) and CBA (+1.8%) as well.

Westpac says its online and mobile banking services have now been restored after an earlier outage, which also hit St George customers.

For the second day running, Westpac and St George customers are having issues accessing bank services through their websites or apps.

Here’s what Westpac has posted today:

Yesterday, Westpac and St George customers reported similar issues before services were restored after 3pm.

We’ll keep you updated if we hear anything else about when you might be able to get back online this afternoon.

The Commonwealth Bank says household spending fell last month, despite increased spending around the footy finals.

The Household Spending Insights index, based on transactions and lending data from CBA customers, declined in September by 0.7 per cent.

While people splashed less cash on hospitality, transport, household items and food and drink, spending on recreation offset some of those declines — largely thanks to purchases of AFL and NRL finals tickets.

“It’s important to note that the only other spending categories to rise in September were all essentials, indicating that increased take-home pay from tax cuts is largely being used to pay down debt and on staples, not spending on discretionary items,” CBA chief economist Stephen Halmarick noted.

“On an annual basis, there was a significant slowdown in the pace of spending growth in the year to September to just to 2.1 per cent, down from 3.7 per cent in August, ” the report read.

One interesting, if unsurprising, trend to note is that renters have pulled back on spending, while those that own their homes outright have increased their spending the most (see chart above!)

“This breakdown emphasises the challenging environment for those who rent and those who have a mortgage, relative to those who own their home outright,” the report said.

It’s a good day for local stocks, with the ASX 200 and the All Ords up three-quarters of a per cent at the moment.

Stocks in Japan are faring even better — Tokyo’s Nikkei 225 has hit a three-month high, rising 1.6 per cent to its highest level since July.

Shares in Tyro Payments have fallen around 16 per cent so far this session.

The Australian company provides payment terminals, mainly for small and medium businesses, putting it in competition with the major banks.

The federal government today flagged a crackdown on debit card surcharges from 2026.

Tyro has responded with a statement to the stock exchange, saying it is aware of the discussions around the proposed ban, and has been “actively engaged” with the Reserve Bank’s review of the system.

“We support any review that assess the true cost of card acceptance, including both debit and credit, for the fair regulation of payment acceptance in Australia,” Tyro CEO Jon Davey said.

But investors didn’t appear reassured about potential impacts on Tyro, with the stock down sharply — taking losses since the start of the year to more than 30 per cent.

The ASX200 has been rocketing higher today. It’s well into fresh record territory at the moment.

It looks like it hit an intra-day high of 8,331 points at 1.32pm.

It’s currently sitting around 8,327 points.

And according to Reuters, with today’s intraday gains factored in, the ASX200 is up more than 18% since this time last year.

ANZ commodity strategists Daniel Hynes and Soni Kumari says China’s commodity imports were strong in September as restocking continued.

“Improving manufacturing activity and the recent announcement of stimulus to boost local property markets will keep underlying demand for commodities solid,” they’ve written in a note.

“Resilient external demand lifted exports of steel and aluminium, but any weakness in external markets will be a headwind.

They say energy restocking continued to secure supply ahead of winter.

Coal imports were 47.6 million tonnes, rising by 12% in the first three quarters of 2024. This is despite record inventories and strong domestic production.

Natural gas imports rose to 11.99mt, the highest volume for this year

Crude oil imports contracted in September to 0.5%y/y, less than the contraction of 2.8%y/y in the first three quarters of the calendar year.

“Unattractive refining margins and a long maintenance season subdued refinery demand. However, low oil prices could boost crude oil imports despite seasonally lean demand in winter,” they said.

Refined copper imports rose to 478kt, the highest level since May.

Concentrate imports rose by 9%y/y, keeping implied copper import growth at 2%y/y.

Improving industrial demand and low prices in early September encouraged importers.

Despite depressed profitability, iron ore imports rose to 104mt, the highest since January.

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The RBA’s “issues paper” for merchant payment costs and surcharging has some interesting graphs in it.

Here’s what they’re telling us:

Merchant service fees in Australia are higher than in some other economies, including some that also regulate interchange fees.

There’s a big difference in Australia between the fees paid by large and small merchants.

The average per-transaction fee (‘cost of acceptance’ for card payments) paid by small merchants is around three times that paid by large merchants.

Transactions on foreign-issued cards are particularly expensive for Australian merchants to accept.On average, these transactions cost Australian merchants around 2.5% for debit and credit cards, which is several times larger than the cost of equivalent transactions on domestic cards.

The high cost of foreign card transactions for Australian merchants appears to be mainly due to high wholesale costs: interchange fees can be as high as 2.4% and net scheme fees are around 1.6%.

The RBA view is that preventing card schemes from imposing ‘no-surcharge’ rules and allowing surcharging at the reasonable cost of acceptance have made a significant contribution to the long-run decline in the average fee that merchants pay for card transactions.

It says the decline in fees for three-party schemes – American Express and Diners Club – is particularly notable, given that these networks are not subject to the RBA’s interchange regulation.

 It’s a nice spot.

Don’t tell the guys at the Betoota Advocate, but Queensland got pipped by NSW again.

The ABS says all travellers to Australia are asked their intended address in the country upon arrival.

In August, the highest number of visitor arrivals for short-term trips was observed for New South Wales with 240,840. Queensland came second (i.e. it was the first loser) with 164,980.

It was followed by Victoria (153,480), Western Australia (63,790), South Australia (17,490), the ACT (8,610), and the Northern Territory (5,050). Tasmania recorded the fewest (4,550).

The ABS has released its August data for overseas arrivals and departures.

In August 2024:

• Short-term visitor arrivals: 658,810 – an increase of 9.2% on one year earlier
• Short-term resident returns: 916,890 – an increase of 6.8% on one year earlier
• Total arrivals: 1,656,470 – an increase of 7.2% on one year earlier
• Total departures: 1,694,440 – an increase of 11.7% on one year earlier

Over on the All Ords (a broader list of companies than the ASX200), have a look at the two worst-performing companies this morning.

SmartPay Holdings is down 11.76%, and Tyro Payments is down 10.5%.

My colleague David Chau says those companies provide EFTPOS/electric payment terminals for businesses.

The Reserve Bank has just put out a media release about its review of merchant card payments costs and surcharging.

“The Reserve Bank of Australia (RBA) is commencing its Review into Retail Payments Regulation. This review will examine the costs merchants face when accepting card payments and the framework for surcharging. The RBA has today released an Issues Paper, inviting stakeholders to provide detailed feedback on the current regulatory framework and to suggest potential regulatory responses. This feedback will be crucial in shaping future reforms to ensure a safe and efficient payments system.

“Australians extensively use cards to pay for goods and services. They benefit from the convenience and security provided by card payments. 

“However, in an environment of heightened concern around the cost of living, card payment costs and surcharging are attracting more attention from merchants and consumers. These issues are linked, since merchants would be less likely to surcharge consumers if card payment costs were lower. 

“It is timely, therefore, to review whether regulatory settings could be adjusted to put further downward pressure on merchant card payment costs and whether the RBA’s surcharging framework remains fit for purpose. This recognises that many years have passed since these rules first came into effect.”

Written submissions can be made until December 3, 2024.

And here’s the kicker:

“Detailed assessments of reform proposals would form the next stage of this review. If the Payments System Board forms a view that consultation on regulatory action is in the public interest, the RBA will further consult on any reform proposals prior to any decisions being made.”

We’re going to hear a lot about surcharges in the coming months, after the federal government took on the banking sector over the fees added to small transactions.

The head of policy for peak body FinTech Australia, Katie Wilson, isn’t totally on board.

Ms Wilson has concerns about “the broader implications of fully stamping out surcharges for debit cards,” she said in a statement.

“Any proposed policy reform needs to be carefully considered to ensure it supports competition and innovation in payments. Without this, small businesses lose the right to choose how to allocate their costs and we risk jobs and innovation in the fintech industry, to consumers’ ultimate detriment.”

An explosion in financial technology (fintech) has changed things, with low cost eftpos solutions, flat pricing models and predictable flat rate for different types of card transactions among the innovations.

“There’s also a risk here of the issue being oversimplified amid the political debate. Merchant fees support more than just banks. If a merchant is charged 20c per transaction, a bank may see 10c and the rest may be split across multiple other parties, including Australian fintechs who manage a smaller part of the payment process. Further to the intricacies of these systems, removing debit surcharges will do nothing to reduce the cost of acceptance for businesses.“

Oil prices fell -2% on Monday as OPEC again lowered its outlook for 2024 and 2025 global oil demand growth while China’s oil imports fell for the fifth straight month.

So energy investors are wearing losses.

There’s an energy sub-index in Australia and that has slipped as much as -1.1% to hit its lowest level since Oct 1

Shares of both Woodside Energy ($25.11) and Santos ($7.11) fell as much as -1.5%, currently trading around -0.9% on yesterday.

Ampol backwards -0.2%, currently $29.09.

The list of companies on the ASX 200 top movers list at the start of trading is not exactly the ASX 20.

There are some larger energy companies, you’ll find most of them down the bottom.

Of the 11 sectors, 7 are in positive territory and 4 (consumers non-cyclicals, energy, utilities and academic and educational services) are backwards.

The ASX 200’s top closing mark was 8269.8-points on September 30. Here are some of the things pushing the market today:

• A strong lead from U.S. markets overnight, where the S&P 500 and the Dow industrials both hit new records 
• Oil prices declined as fears of a broadening Middle East conflict lessened
• Telstra keeps  its FY 2025 guidance unchanged in an update at its annual meeting, which is still going.